As stock of online search and review site Yelp (
YELP
) slacked on Monday after news circulated about a new-found
rivalry in the update of Facebook (
FB
)'s "Nearby" feature, hedge fund firm Joho Capital saw light in
the opportunity and pursued Yelp as a new buy.
New York-based Joho, which was founded by Guru investor
Robert Karr
, is now 5.26 percent owner of Yelp. Though the tech stock's
slight price slum only veered about $1 off from its Friday
closing price, Joho proceeded to take on a new holding of 894,795
shares.
This morning, Yelp trades around $18, about the same range as
yesterday's price; its stock is down 0.85 percent.
YELP
data by
GuruFocus.com
With a market cap of $1.15 billion, San Francisco-based Yelp
establishes online communities that actively review local
businesses, serving as a word-of-mouth centered guide for users.
Yelp has boomed in major metros across the U.S., Canada, UK,
Ireland, France, Germany, Austria, the Netherlands, Spain, Italy,
Switzerland, Belgium, Australia, Sweden, Denmark, Norway,
Finland, Singapore and Poland, according to the site's investor
relations section.
Just earlier this month, the company announced a new fully
established Yelp community in Turkey.
In its third quarter financial results, Yelp reported an increase
in net revenue by 63 percent compared to year-over-year data. The
site's average number of monthly unique visitors grew 37 percent,
and its active local business accounts grew 82 percent, both
compared to the same period last year.
Yelp Chief Financial Officer, Robert Krolik, who sold shares of
the company on Dec. 12, said in a news release that Yelp's record
numbers in revenue and adjusted EBITDA are ahead of the company's
expectations.
"These results demonstrate that our playbook continues to deliver
growth across our markets," he said. "Additionally, our recent
acquisition of [Europe's largest local reviews site] Qype will
accelerate our expansion into key international markets such as
Germany and the UK."
Though Yelp's third quarter gave its executive board much to be
proud of, Yelp's market value has shriveled by at least 20
percent year to date.
The cutthroat competition between local discovery applications,
such as TripAdvisor and Foursquare, has placed unavoidable
pressure on Yelp for years. Monday's Facebook feature update
announcement bears no difference, and actually heats up the
rivalry even further, given that Facebook provides the advantage
of seeing actual reviews from friends, compared to reading
reviews from complete strangers.
In Facebook's press release announcing the feature update,
details conveyed that users of the Nearby application will be
able to "find local spots your friends have recommended, checked
into, or liked...[and] When you find a place that looks
interesting, tap to see info like friends who've been there and
business hours."
Yelp has garnered the appeal of other Gurus besides Karr. Steven
Cohen presented the stock as a new buy in the third quarter. Tom
Russo, on the other hand, purchased shares in the second quarter
and sold out by the third.
Yelp is one of 11 stocks in Joho Capital's ultra-concentrated
portfolio. With a total value of $628 million, the firm
predominantly invests in the technology, automobile, machinery,
retail, consumer goods, basic materials and financial services
sectors.
Its top five holdings are Google Inc. (
GOOG
), Estee Lauder Cos Inc. (
EL
), Mead Johnson Nutrition Company (
MJN
), New Oriental Education & Technology Group Inc. (
EDU
) and SINA Corp. (
SINA
).
To view Robert Karr's recent trades, visit his latest stock
picks. Also view his undervalued stocks, high-yield companies and
top growth stocks.
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